ENERGY EFFICIENCY DIRECTIVE (EED)

Legislative Framework

 

The revised Energy Efficiency Directive (EU/2023/1791), published in the Official Journal on September 20, 2023, marks a significant step forward in the EU's commitment to energy efficiency. The update firmly establishes the ‘energy efficiency first’ principle as a legal obligation for the first time. This principle mandates EU Member States to prioritize energy efficiency in all relevant policy-making and major investment decisions across both energy and non-energy sectors.

This revision follows the European Commission's proposal for a recast directive on energy efficiency presented in July 2021 as part of the EU’s Green Deal package. The 2021 proposal was further strengthened by the REPowerEU plan, introduced by the Commission in May 2022, which focused on reducing the EU's dependence on fossil fuel imports, particularly from Russia.

BACKGROUND

The Energy Efficiency Directive (EED) was initially adopted in 2012 to help the EU and its Member States achieve energy efficiency improvements of at least 20% by 2020. The directive set an energy consumption cap for the EU, with specific provisions to guide Member States toward meeting this target.

In 2018, the EED underwent its first revision, increasing the energy efficiency target to 32.5% by 2030, alongside a requirement for Member States to increase their annual energy savings obligations to 0.8%.

As part of the Fit for 55 package, the European Commission released a proposal on July 14, 2021 (COM/2021/558 final) for a further revision of the EED. This revision aligned with the Green Deal’s overarching goal of reducing greenhouse gas emissions by 55% by 2030. The need for more ambitious and accelerated energy efficiency measures became evident, prompting another update under the Fit for 55 initiative, eventually resulting in the 2023 revision.

This updated directive establishes more ambitious targets and a stronger legal framework to achieve the EU's long-term climate and energy goals, focusing on comprehensive energy savings, reductions in energy consumption, and sustainable energy usage across all sectors.

Updated Key Measures Proposed in Fit for 55 by the Commission

The Fit for 55 package introduced a series of ambitious measures aimed at accelerating the EU’s progress towards its 2030 climate and energy goals. The revision of the Energy Efficiency Directive (EED) played a central role in this strategy, with several key measures aimed at improving energy efficiency across multiple sectors.

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Key measures proposed in Fit for 55 by the Commission

Key measures proposed in Fit for 55 by the Commission

Key Measures Proposed in the Fit for 55 Package:

  1. Higher Targets for Energy Consumption Reduction:
    • The revised EED set a target for reducing primary energy consumption by 39% and final energy consumption by 36% by 2030 compared to 2020 projections.
  2. Stronger Focus on Heating and Cooling:
    • Greater emphasis on improving energy efficiency in heating and cooling systems, which account for a significant portion of building energy use.
  3. Increased Annual Energy Savings Obligation:
    • Member States' annual energy savings obligation would nearly double for the period 2024-2030, increasing from 0.8% (as stipulated in the 2018 EED revision) to 1.5% under the new directive.
  4. Public Sector Energy Reduction:
    • The public sector must reduce its total energy consumption by 1.9% annually, an increase from the 1.7% target in previous versions, highlighting the sector’s role in leading energy efficiency efforts.
  5. Mandatory Renovation of Public Buildings:
    • At least 3% of the floor space of buildings owned by public bodies must be renovated each year to meet Nearly Zero-Energy Buildings (NZEB) standards, up from earlier less stringent goals.
  6. Energy Efficiency in Public Procurement:
    • Public procurement procedures must now systematically integrate energy efficiency requirements, ensuring that all public investments support energy efficiency objectives.
  7. Addressing Energy Poverty and Vulnerability:
    • Member States are required to implement measures targeting energy efficiency improvements for those affected by or at risk of energy poverty, vulnerable customers, and residents in social housing.
  8. Energy Efficiency First Principle:
    • A clearer legal basis for applying the ‘energy efficiency first’ principle, introduced in the 2018 EED, ensures that energy efficiency is prioritized in all major investment and policy decisions. The principle now applies across sectors, mandating its implementation in all decision-making processes.
  9. Monitoring Energy Use in Data Centers:
    • Member States are required to monitor and publicly disclose data on energy use in data centers, reflecting the growing energy consumption in the digital sector.

2030 framework

As part of the Winter Energy Package introduced in 2016, the European Commission proposed a 30% binding EU energy efficiency target for 2030, based on indicative national targets. By 2018, the European Parliament endorsed an even more ambitious 35% energy efficiency improvement target.

In the 2018 revision of the EED, the annual energy savings obligation under Article 7 was increased from 0.75% to 1.22%, covering sectors such as transport from 2020 onwards. This led to trilogue negotiations starting in February 2018, resulting in a provisional agreement among EU institutions on 19 June 2018.

The final text was adopted by the European Parliament on 13 November 2018 and by the Council on 4 December 2018, with a headline EU target of at least 32.5% energy efficiency improvements by 2030. The provisional agreement published on 17 July 2018 established the following:

  1. Headline EU target of at least 32.5% energy efficiency improvements by 2030, with non-binding national contributions reflecting final and/or primary energy consumption.
  2. Energy savings obligations of 0.8% per annum between 2021 and 2030, calculated based on final energy consumption. This could include policy measures introduced before 2020 that continue to impact energy savings during the 2021-2030 period.

More sectors were included under the energy savings obligations than in previous versions of the EED. However, Member States retained the option to exclude certain sectors, including transport, industrial activities, and specific energy use in buildings.

Final Adoption

On 21 December 2018, the Directive (EU) 2018/2002, which amended the Energy Efficiency Directive (2012/27/EU), was published in the Official Journal of the European Union. It entered into force three days later.

In 2023, the Energy Efficiency Directive (EU/2023/1791), which includes the latest revisions under the Fit for 55 package, was published, further increasing targets and obligations to meet the EU’s long-term climate goals.

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